Which of these is an opportunity cost associated with dropping a business segment?
A) The existing variable costs
B) The avoidable fixed costs
C) The increase in employee morale
D) The benefits from using excess capacity for something else

Question

Quizplus · Accepted Answer

Opportunity cost refers to the potential benefits that are foregone by choosing one alternative over another. In this case, the opportunity cost of dropping a business segment is the benefits that could be gained from using the excess capacity for something else.

Which of These Is an Opportunity Cost Associated with Dropping